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Employers still view retirement plans mainly as a benefit rather than as the primary means for their employees to support themselves after retirement, according to a new survey by Wells Fargo Institutional Retirement and Trust. Fewer than half (45%) say the “primary” goal of offering a retirement plan to their employees is to “provide employees with the means to achieve a financially sound retirement,” according to the report, while slightly more (51%) say the primary reason they offer a retirement plan is to “provide competitive benefits to attract and retain employees.” Disconnect “Ed” Asked why they think employees participate in a company-sponsored 401(k) plan, only about a third (30%) of employers say it is because they think participants want to save enough to retire comfortably. The most common response, cited by 42% of employers surveyed, was that employees participate in order to take advantage of the company’s 401(k) match. However, when Wells Fargo asked that question of employees in 2008, those responses were reversed; Just over a third (35%) of employees said they were participating so that they could save enough to retire comfortably, while only 33% cited the company match as their incentive. “We have a real crisis of retirement savings and believe companies can play a crucial role in addressing this by educating and motivating their employees to prepare for a solid and sustainable retirement,” said Laurie Nordquist, director of Wells Fargo Institutional Retirement and Trust. “The fact that fewer than a third of plan sponsors think employees participate in 401(k) plans because they want to retire comfortably suggests there is room for improvement in educational efforts to make sure employees understand the need for income that will see them through retirement. That should be what motivates employees to participate in the plan, above all else.”
Employers still view retirement plans mainly as a benefit rather than as the primary means for their employees to support themselves after retirement, according to a new survey by Wells Fargo Institutional Retirement and Trust. Fewer than half (45%) say the “primary” goal of offering a retirement plan to their employees is to “provide employees with the means to achieve a financially sound retirement,” according to the report, while slightly more (51%) say the primary reason they offer a retirement plan is to “provide competitive benefits to attract and retain employees.”
Disconnect “Ed”
Asked why they think employees participate in a company-sponsored 401(k) plan, only about a third (30%) of employers say it is because they think participants want to save enough to retire comfortably. The most common response, cited by 42% of employers surveyed, was that employees participate in order to take advantage of the company’s 401(k) match.
However, when Wells Fargo asked that question of employees in 2008, those responses were reversed; Just over a third (35%) of employees said they were participating so that they could save enough to retire comfortably, while only 33% cited the company match as their incentive.
“We have a real crisis of retirement savings and believe companies can play a crucial role in addressing this by educating and motivating their employees to prepare for a solid and sustainable retirement,” said Laurie Nordquist, director of Wells Fargo Institutional Retirement and Trust. “The fact that fewer than a third of plan sponsors think employees participate in 401(k) plans because they want to retire comfortably suggests there is room for improvement in educational efforts to make sure employees understand the need for income that will see them through retirement. That should be what motivates employees to participate in the plan, above all else.”
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